Obvious successes
A transformation always involves risks, but Palomar is not just at the beginning of a transformation; it has long since proven that the strategic realignment is successful.
In each of the last three years, profits have jumped by more than 30 % and considerable growth is also expected in the future.
In the first quarter of the current financial year, sales (underwriting revenue) increased by 52% to USD 164.1 million.
Earnings climbed by as much as 72% to USD 1.87 per share, far exceeding expectations of USD 1.58.
As a result, Palomar raised its forecast for annual profit from USD 180 - 192 million to USD 186 - 200 million.
The share then reached a new all-time high of around USD 175 at the end of June and was then sold off - without any news, at least I couldn't find anything relevant.
Outlook and valuation
In the second quarter, sales (underwriting revenue) increased by 48 % to USD 181.6 million.
Earnings climbed by 41% to USD 1.76 per share, once again exceeding expectations of USD 1.68.
As a result, Palomar raised its forecast for net income from USD 186 - 200 million to USD 198 - 208 million.
As a result, the share price fell further and reached a low of USD 110. The share price currently stands at USD 120.86.
As profits are expected to jump by 41% to USD 7.20 per share in the current financial year, Palomar has a forward P/E of 16.8.
The Board of Directors has reacted to this and decided to buy back shares to the value of USD 150 million, which corresponds to around 5% of the market capitalization
Palomar share: chart from 20.08.2025, price: USD 120.86 - symbol: PLMR | Source: TWS
The long-term outlook was confirmed again at the Investor Day in March. Palomar is targeting a doubling of normalized net income to over USD 10 per share by 2027.
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